Safety net unravels

More middle-income Americans have no health insurance

SAN FRANCISCO (MarketWatch) -- The problem of getting and keeping affordable health insurance affected substantially more middle-income workers in 2005 as more went without coverage, according to a new report.

Among working adults with annual incomes of $20,000 to $40,000, 41% were uninsured for at least part of the past year, up from 28% who were at least temporarily without coverage in 2001, according to a survey of 4,350 people from The Commonwealth Fund, a research group in New York.

Low-income Americans typically face the biggest challenge with health insurance, and the trend of more moderate-income people losing it is "worrisome," said Sara Collins, senior program officer for the Commonwealth Fund.

"Forty-thousand dollars a year is by no means a low-wage job," she said.

The numbers also show that in the U.S. population as a whole there were 32 million who were uninsured at the time of the survey, and 82% of those had been uninsured for a year or longer. Among the 16 million who had insurance at the time of the poll but had spent some time without coverage in the past year, about one-fourth had at some point been uninsured for a year or longer, Collins said.

Several factors in the last few years have combined to make it tougher for moderate-income families to hold onto their health plans. Wage growth has been stagnant and the percentage of employers -- especially small firms -- offering coverage has been falling, said Gary Claxton, vice president of the nonpartisan Kaiser Family Foundation in Washington.

"Health-insurance costs have been going up so much faster than income, it's not surprising that difficulty in getting access to health benefits and keeping them would be going up the income scale," he said.

Of the estimated 48 million uninsured adults age 19 to 64 in the country, 67% were in families where at least one person was working full time, according to the report.

Increased cost-sharing where workers are on the hook for more out-of-pocket spending on deductibles, copays and premiums has put health care out of reach for more people, Collins said. And those on their own without job-based plans often find the individual market unaffordable or inaccessible, especially if they have preexisting conditions, she said.

"Premiums might be quite high or they might not be covered at all," she said. "Because of the underwriting issue, it makes that market problematic for people looking for alternatives."

About 6% of those surveyed had individual insurance.

Medical debt burdens

Household financial problems associated with health care are on the rise as well. One in five adults, including insured and uninsured, currently has medical debt being paid off over time, the survey said. About 44% of those with medical debt reported it was $2,000 or more.

The majority of Americans don't use enough health care to get them in such a bind, Claxton said. "In any given year, 20% of people account for 80% of the costs."

But for those who do end up needing hospital and other expensive care, the bills can be a hardship, especially if they have a bare-bones health plan or no insurance at all, he said.

"When you look at some of the policies now where the out-of-pocket limit might be in the $6,000 to $8,000 range for a family, it's not that hard to get there."

Collins agreed. "One really interesting finding is this affected both uninsured people in lower-income and higher-income households. Rates of debt were actually highest among those with higher incomes," she said, adding that 60% of adults with income of at least $40,000 have problems with medical bills or accrued debt.

More than half of uninsured adults said they had medical-bill problems. Of those, 49% used their entire savings to pay it off, according to the survey. The need to pay medical bills prevented two of five from shelling out for basic necessities such as food, heat or rent.

Care of teeth and oral health often take a hit when insurance disappears. The portion of uninsured adults who had a dental exam in the past year was 35%, half the rate of those with coverage.

The consequences of going without health insurance often lead to a downward spiral of poorer health and costly care, Collins said.

Almost six in 10 adults with chronic illnesses who spent time uninsured in the past year didn't fill or skipped their medications because they couldn't afford them, the study said.

They also were more than twice as likely to go to an emergency room or hospital for care of those chronic conditions than people with health coverage, with 35% of uninsured people with conditions such as asthma or diabetes visiting an emergency room or staying in the hospital overnight compared with 16% of those insured all year who had a chronic condition.

People with gaps in coverage also tended to go without recommended cancer, cholesterol and blood-pressure screenings more often, according to the report.

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